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Company Analysis
AAMIR AZAD 2ND SEM MBA(Pharm.) NIPER
Flow of Presentation
Company Profile Top Brands and Research & Development
Debt Burden & Crisis Phase Corporate Debt Restructuring & Future Prospects
Top Brands..
Diabetalogy Cough Therapy NeuroPsychiatry
Wosulin (Recombinant Insulin ) Mopaday (Oral Ant diabetic) Erythropoietin) Glimaday (Oral Ant diabetic)
Zedex
SpasmoProxyvon
Bro-Zedex
Libotryp
Viscodyne
Tryptomer
Acquisition Spree
1998- Wallis Laboratory, UK. It was among the first to sense the opportunity in European generics market. 1998- Merind, India 2003- CP Pharma for $18mn. Through this acquisition Wockhardt became one of the top 10 generic companies in UK Due to CP Pharmas significant presence in the hospital segment, Wockhardt became the number two player in this segment
Acquisition Spree
2004- The company entered Europes largest pharmaceutical market Germany. Acquired Esparma for $11 million June 2006- Acquired Dumex from Royal Numico along with its 2 fast growing brands Protinex and Farex Oct. 2006- Acquired Pinewood Laboratories . Established its presence in Ireland. largest branded generic company in Ireland. Deal size was $150mn March 2007- Entered France. Acquired Negma. Deal size was $265mn. Negma is the fourth largest integrated pharmaceutical company in France. It has 172 product patents
FCCB Unlocked
Foreign Currency Convertible Bond (FCCB) - Mix between debt and equity instruments A quasi-debt instrument attractive to both investors and issuers Investors receive the safety of guaranteed payments on the bond and are also able to take advantage of any large price appreciation in the company's stock All transactions in foreign currency
Source: SPJIMR
FCCB Unlocked...
Benefits for Investors Benefits for Issuing Company
To bring down their exposure in one Easy way to dollarize balance country by diversifying their sheet portfolio If share prices goes up, benefits from capital appreciation Assured of fixed return and capital protection Investors buy FCCBs not for debt but for lure of equity Low overseas interest rates
Can be raised within a month whereas other debt take much long time Relatively strong rupee will benefit the issuing company
Source: SPJIMR
Recession led to the depreciation of rupee. Rupee depreciated by about 20 per cent since April 2008 and breached the psychological mark of Rs 50 in nov.2009. It led to huge Forex derivative loss also known as Mark-to-Market loss. Forex derivative losses for Indian Companies was nearly $3 bn Biocon suffered loss of 26 crore in June quarter 2008 MindTree Consulting suffered a loss of 13 crore in june quarter
The Last Resort Wockhardt approached the CDR cell of ICICI Bank in April 2009 Indian banks have bought Wockhardt's FCCBs from foreign investors, as part of the drug major's corporate debt restructuring (CDR) programme It was first time that FCCBs were part of a debt restructuring process involving an Indian company. Main aim of CDR is to restructure its liabilities that typically include lower interest rates and a longer, easier payment schedule to reduce the debt burden.
Latest Happenings
March 23,2011
Bombay High Court had granted ad-interim relief to Wockhardt by staying the admission of a winding up petition filed against it by its FCCB holders. Wockhardt has agreed to deposit in court Rs 115 crore by May 3, 2011, as per direction of the Bombay high court
Chairmans Speech at 11th Annual General Meeting on Sep.20,2010: FCCBs issue has been resolved with 75% of holders EU loan restructuring is near completion Launch of Metoprolol ER in US. A billion dollar market potential with only 3 players operating in it. Brokers are also optimistic that Wockhardt will tide over the debt crisis and will be on the track of growth in future
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